On Monday, SA Breweries (SAB) – owner of Castle Lager, Hansa, and Black Label – received permission from government to transport beer to its depots.
SAB has around 132 million litres of beer – roughly the equivalent of 400 million bottles of beer – sitting in its tanks, which it can’t bottle due to the restrictions on alcohol capacity at its breweries.
While it has not been brewing beer since the start of the lockdown, some staff have been fermenting and bottling alcohol. It takes up to 21 days to produce the beer before it has to be bottled.
SAB is not legally allowed to store brewed beer at its brewery facilities above a certain capacity, which it reached last week. The company said it would have to start dumping beer to comply with the legal limits.
“Warehouses at SAB’s seven breweries are now at full capacity and unable to absorb any further inventory which impacts any current beer in the production process being bottled and stored, culminating in the destruction and disposal of the inventory,” the company said in a statement.
In a statement on Monday evening, SAB said it has collaborated with various government ministries and reached an agreement which will enable the company to transport its beer inventory over the course of the next few weeks.
But it’s too late for some of the alcohol, and SAB had to start “disposing” of some of the beer last week.
Last week, journalist Vumani Mkhize tweeted pictures of SAB beer being dumped into drains.
The transport of alcohol – apart from alcohol for export – is currently illegal under South Africa’s lockdown regulations. The company has been in negotiations with the department of trade and industry to allow it to move the beer.
SAB said that if it had to destroy 132 million litres of beer, the company would only be able to operate at about 50% capacity for four months.
“This would mean the loss of about 2,000 jobs – half of SAB’s frontline workforce.”
It would also have meant an immediate loss to the government in excise tax of around R500 million.
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“This would literally be pouring that tax revenue down the drain, at a time when government – and the citizens of South Africa – have an urgent need for those funds.”
SAB said that it will work with the police to secure the alcohol while in transit.
Last month, a truck transporting alcohol for export was hijacked in Cape Town and many bottle stores have been looted over recent weeks during lockdown.